Should you ask for a rebate or just offer less?
Some buyers ask: why not skip the rebate and just offer $10,000 less? Because the two are not the same thing, and in many deals you can have both.
A price cut depends on the seller
Whether you can offer less is up to the market and the seller. In a multiple-offer situation, offering less can lose you the house. A rebate is set in advance with your own agent and does not depend on anything the seller agrees to.
A rebate does not touch the price
The contract price stays where it is. That has side effects:
- Property transfer tax in BC, and documentary stamp tax on a Florida mortgage, are calculated on the price or loan amount, so a rebate does not reduce them. A price cut does.
- Your lender appraises against the contract price, so a rebate does not change your loan-to-value. A price cut can help it.
They stack
You negotiate the best price you can, and then you get the rebate on top. On a $900,000 Burnaby condo, negotiating $15,000 off and getting the 50% rebate puts about $21,000 back in your favour in total.
Which matters more
In a slow market, negotiation is where the big money is, and a good agent earns their fee there. In a hot market, there may be little room to negotiate, and the rebate is the one saving you can count on.